The auto market continues to race in price reduction

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The year-end automobile market is still in arace of price reduction. Photo: Nguyen Ha

The race of big companies

In the last two months of 2019, Toyota Motor Vietnam (TMV) applies incentives for four models assembled in Vietnam: Vios, Corolla Altis, Fortuner and Innova. Preferential rates are up to VND100 million (including registration fee, 1 year Toyota body insurance, free service coupons).

In addition, the TMV also applies an0% interest rate in the first 6 months to customers when buying imported cars and carsassembled in the country. At the same time, dealers also apply a 20% discount when replacing annual wear-and-tear parts.

This is the biggest discountby TMV. Obviously,the move of this largest automobile joint venture in Vietnam has had a strong impact on the Vietnamese automobile market.

Immediately, TC Motor – the leading business in the passenger cars market – has entered the race with a discount program for three small cars. Specifically: Hyundai Grand i10 reduced by VND15 million (the price was from VND300 million to VND385 million); Hyundai Elantra reduced by VND20 million (the price was from VND530 million to VND770 million); Hyundai Kona is down by VND40 million (the price is from VND590 million to VND750 million).

From November 2019, customers who buy six versions of the 2019 Mazda CX-5 2019 will receive a discount of up to VND50 million depending on the version and will receive a premium accessory package. Especially, the old Mazda CX-5 is offered with a discount of VND100 million (including a discount of VND30-50 million with a high-end accessory kit worthVND29 million and a 3-year maintenance package worth VND21 million). The predecessor version of the Mazda3 has the highest special discount of up to VND70 million (including a discount of VND20 - 30 million, a high-quality kit of VND20 million and a 3-year maintenance package of VND20 million). The Mazda CX-8 is also offered a discount of up to VND50 million for premium versions; Mazda6 fell byVND60 million and Mazda 2 fell byVND70 million.

Other brands follow

The three biggest companies in the market reduced prices sharply so other brands havefollowed.

In the market,there are over 20 models of cars has reduced prices in the past month.

In the high-end segment, the prices of BMW brand with models 18i, 218i, 320i, 520i, 530i, 730Li and X1 have been reduced byhundreds of millionsof VND. For example, the BMW 320i is discounted up to VND300 million; while the BMW 520i is discounted by VND290 million.

In December 2019, Volkswagen Passat models are also supported with a registration fee of VND40 - 140 million (VND40 million forVolkswagen Passat BlueMotion High; VND140 million for Passat BlueMotion Comfort); discounting the prices of Volkswagen Scirocco GTS models byup toVND100 million (from VND1.399 billion to VND1.299 billion).

A series of popular cars are also seeing disocunts. For example, discounting the pricesof Mitsubishi Pajeroby VND140 million; Mitsubishi Outlander version 2.4 CVT Premium is byup toVND91 million; Mitsubishi Outlander version 2.0 CVT Premium with a discount ofVND86 million; Mitsubishi Outlander version 2.0 CVT, offered additional leather seats with a discount ofVND8.5 million. Cheap Mitsubishi Mirage models are offered a discount of VND20 - 30 million with fuel vouchers ofVND10 to 20 million.

In December 2019, Suzuki also introducedpreferential policies for many models in Vietnam. Specifically, Suzuki Swift has a discount of VND50 million; Suzuki Celerio is offered at a discount of VND15 million for both versions.

Included in the discount list in December is Honda City with a reduction of VND20-45 million depending on the version at dealers.

Another Japanese model with a huge discount is Isuzu Mu-X. Specifically, the Isuzu Mu-X version reduced by VND75 million/unit; Isuzu Mu-X B7 1.9 4 × 2 MT reduced by VND35 million/unit; Isuzu Mu-X Prestige 1.9 4X2 AT reduced by VND71 million/unit.

Customers who buy Nissan X-Trail in December will also receive VND30 million in cash and other accompanying gifts; Nissan Sunny withVND20 million in cash and gifts.

Two models of Chevrolet from the US are the Colorado pickup truck and Trailblazer SUV, which are also offered at a discount of VND100 million. Specifically, customers who buy Chevrolet Trailblazer SUV, including 3 versions of Trailblazer 2.5L 4x2 MT LT, Trailblazer 2.5L 4x2 AT LT and Trailblazer 2.5L 4x4 AT LTZ will receive a discount of VND100 million.

And if you buy a Chevrolet Colorado pickup truck with 2.5L 4x4 MT LT, 2.5L 4x2 MT LT and 2.5L 4x2 AT LT, you will get a discount of VND30 million. The other two versions of this pickup model are 2.5L 4x4 AT LTZ and 2.5L 4x4 AT LTZ HIGH COUNTRY with a discount of VND50 million.

And if you choose to buy threemodels of Ford - EcoSport, Everest and Transit,you will received a discount of VND10 to 30 million.

In the last month of the year, customers buying cars are "overwhelmed" by gifts, promotions and incentives from automobile brands.

Customers are "overwhelmed" by discounts and gifts.

Policies change, car prices have a chance to decline deeply

Discounts are an inevitable solution byfirms to increase sales and reduce inventories in the context that supply is greater than demand. This is considered to be an abnormal fluctuation of the market, because at the end of the year, the car market often experiences a shortage of cars. For example, at the end of 2018, to buy a car before Lunar New Year, many customers had to pay hundreds of millionsof VND more.

Moreover, many moves show that some policies related to cars will have changes in the future, strongly impacting car prices.

At the regular Government press conference in the afternoon of December 2, Deputy Minister of Industry and Trade Do ThangHai said: “To support businesses to reduce production costs, in the future, the Government, the ministries and the sector will have solutions to maintain and create markets for the automotive industry to develop. The Government will protect and create the development of the domestic automobile market with technical barriers and ensure international commitments.”

Deputy Minister of Finance Vu Thi Mai also said that the Ministry of Finance is amending and expected to submit to the Government a Decree amending and supplementing Decree 125 in December 2019 in the direction of creating more favorable conditions and more incentives for businesses and industries that support automobile manufacturing and assembly.The draft amending the Decree provides a proposal for a 0% tax rate for domestic automobile parts and accessories, even imported goods.

Thus, it is forecasted that in the future, the price of domestically produced cars will continue to have the opportunity to fall, leading to the price reduction of imported cars to compete.